Stevenson v. Wilson and Others [1907] ScotLR 44_339 (22 January 1907)

Stevenson v. Wilson and Others [1907] ScotLR 44_339 (22 January 1907)

Where a vendor of shares remains the registered holder due to the company’s refusal to register the purchaser, the vendor is obliged to receive dividends and account for them to the purchaser so long as his name remains on the register and the beneficial interest is with the purchaser. The vendor cannot refuse this obligation while retaining the purchase price, unless he rescinds the contract and returns the price.

Citation
[1907] ScotLR 44_339
Parties
Pursuer: Daniel Macaulay Stevenson; Defender and Reclaimer: John Wilson, C.A., Glasgow (trustee on the sequestrated estates of J. & D. T. Colquhoun); Defender: John Wilson (as an individual); Defender: J. M. Smith, Limited, Glasgow
Jurisdiction
Scotland
Judgment Date
22 January 1907
Procedural Posture
Civil / Appeal (reclaiming Note) From Interlocutor of Lord Ordinary
Outcome
Appeal refused; interlocutor of Lord Ordinary adhered to.
Legal Topics
Transfer of Shares, Directors' Discretion to Refuse Registration, Trustee Obligations, Beneficial Ownership, Accounting for Dividends
Company Law Trusts and Equity Transfer of Shares Directors' Discretion to Refuse Registration Trustee Obligations Beneficial Ownership Accounting for Dividends

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Parties

Daniel Macaulay Stevenson

Pursuer

John Wilson, C.A., Glasgow (trustee on the sequestrated estates of J. & D. T. Colquhoun)

Defender and Reclaimer

John Wilson (as an individual)

Defender

J. M. Smith, Limited, Glasgow

Defender

Procedural Posture

Civil / Appeal (reclaiming Note) From Interlocutor of Lord Ordinary

Legal Issues

  1. 1 Whether a vendor of shares, whose transfer is refused registration by the company, remains obliged to receive dividends and account to the purchaser.
  2. 2 Whether the vendor stands in a fiduciary or trustee position towards the purchaser for the shares and dividends.
  3. 3 Whether the company is obliged to recognise the beneficial owner or only the registered shareholder.

Ratio Decidendi

Where a vendor of shares remains the registered holder due to the company’s refusal to register the purchaser, the vendor is obliged to receive dividends and account for them to the purchaser so long as his name remains on the register and the beneficial interest is with the purchaser. The vendor cannot refuse this obligation while retaining the purchase price, unless he rescinds the contract and returns the price.

Court Disposition

Appeal refused; interlocutor of Lord Ordinary adhered to.

Orders

  • Declarator granted that pursuer has sole beneficial interest in shares and dividends as against Wilson, so long as Wilson remains on the register and the beneficial interest persists.
  • Declarator granted that Wilson holds shares in trust for the pursuer, limited to the period he remains registered holder and the beneficial interest continues.